Three Charts On Why This Time Is 'Not' Different For Stocks

Tyler Durden's picture

We are constantly told that this time is different and we are on a sustainable magic carpet ride to growth, that stocks are merely 'stabilizing' to allow earnings to catch up with valuations, and that buying-the-dip is the obvious trade. However, as the three charts below indicate - its no different this time at all. As Barclays notes, VIX and credit markets are leaking exactly as they did in 2010 and 2011 in preemptive anticipation of the end of Twist (and LTRO) leaving stocks vulnerable to the real shocks of a real macro event risk world; equity performance remains too good to warrant a central bank response (as we just saw in the FOMC minutes) and TIPS breakevens are far above previous intervention levels; and while bank funding fears, growth slowdown concerns, and sovereign downgrade worries are supposedly lesser than in previous sell-off periods, we suggest they are absolutely rising in anxiety and that is the catalyst for the next leg down before the inevitable QE/LTRO occurs.

With central banks clearly stepping away and letting economies and markets fend for themselves, performance is much more vulnerable to negative developments...


And the hope that they will step in soon is unwise - as we remain significantly above previous Bernanke put strike moves and TIPS breakevens are considerably above previous intervention levels...

and key fundamental reasons for a sell-off do have some differences BUT those differences are even starting to look less and like differences and more and more like re-erupting again...

Source: Barclays

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sbenard's picture

How dare you Tyler! This time MUST be different! Who needs an economy? We have PRINTED prosperity now!

(sarcasm off)

Michael's picture

Which came first, LTRO-3 or QE-3?

Xkwisetly Paneful's picture

Jews need hating somewhere! If not mini jew haters certainly need training.


From the masters of this time IS different,

the world is going to end and gold is going to replace the USD.

Place just goes from hysterical to farcical.

fonzannoon's picture

Not for nothing but didn't the market(s) hold up for about a month after QE2 ended? I feel like this is coming early this time.

dmger14's picture

The  half life of QE is diminishing.  Maybe the stock market boost from QE3 won't last a month, but by then the fiat fear will continue driving PMs higher as the great transfer of safety from treasuries to gold arrives?

Matt's picture

They've learned their lesson; it's all about FLOW, not STOCK.

The next intervention must be constant and accelerating until the growth is self-sustaining. 

A steady ramp right up to the edge of the cliff, I suspect.

resurger's picture

Who profited from JP Globals Loss?

The Hedge Funds, or there was a whale on the other side of the "Hedge"? I mean they all knew the crazy fucker was long the IG9

Anyone has an idea? Thnx

txsilverbug's picture

Id like to print a new economy.. this one sucks.

Zero Govt's picture

"..this one sucks"

Yep, the hoovering machine is called Govt

..been wrecking nations for Centuries but we'll never learn (see Greece voting to re-arrange the deckchairs on Govts Titanic)

Motorhead's picture

Charts, bitchez!

midgetrannyporn's picture

Please, the first big move down and bernaked will ride to the rescue on his trusty donkey.

Bullish Bear's picture

Buy the Fucking Dip...

chancee's picture

ES not allowed to break down as usual...  Total BS price action.

resurger's picture

i think this Greece Crises is now played for MF Morgan to unwind some of the long positions, once the unload is complete .. Algo On ...

barliman's picture



How did the ? on the "State of the Banks - Exposure to Euro Area" not get circled?


twh99's picture

What happens to precious metals when the market goes down?

Zero Govt's picture

they usually follow

'Risk Off' normally applies across the board

pleseus's picture

A large correction is coming for equities, most likely after the Facebook hope filled bounce.

besnook's picture

the silver chart is tantalizing, though.

buzzsaw99's picture

I am completely unafraid. The fed has guaranteed that I shall never lose one thin dime nominal. Stocks are safer than bonds these days.

adr's picture

From now on the definition will be as follows:

farce (n): global stock market 2009-2012

SheepDog-One's picture

Until theres a face-melting -1,000 point stock drop QE is shelved.

Nice chart though btw.

daugie54's picture

"...equity performance remains too good to warrant a central bank response (as we just saw in the FOMC minutes) and TIPS breakevens are far above previous intervention levels;..."

Just to play devil's advocate - if Ben's goal is to pad the wealth effect with rising equity values, why would he wait until prior intervention levels to ease again? That simply creates ae sideways sawtooth pattern. If the intervention points are higher than before, he theoretically creates an upward sloping sawtooth, which would be his desired goal. 

I'm not saying it works, just trying to think like they do...  

midgetrannyporn's picture

Have a cigar, you're gonna go far.

Umh's picture

There is money to made if you know when the market will go up. A series of predictable ups and downs can be used to make beaucoup money.

q99x2's picture

We have just begun the down hill slope compared to the last two. Can't the old Barron Robber Ben Bernank give us a little more time before he starts giving the teachers, firemen and police's pensions away again.

Cycle's picture

I'm on a plane and the pilot doesn't like the air speed because it's too close to stall speed.  So instead of making a landing while he still has control, the pilot mangles and munges the air speed indicator and substitutes a glass coaster with 450 MPH written on it with a Sharpy marker, which he proudly shows the co-pilot and a few select myopic passengers who then spread the good word. Don't worry. No problem.

Then I wake up and realize I just dreamt of the last flight of Capt. Ben Bernanke.

nantucket's picture

funny stuff.  so you're saying the coaster and sharpy WON'T work?

Father Lucifer's picture

I compel you to BTFD!!!!!!!!!!!!!

Shizzmoney's picture

And cue:














Matt's picture

that's more of a linear currency debasement. It really looks more like this:





warezdog's picture

Public pensions have always been on the hook one way or another. When private companies loot them or even borrow from them and pay it back are found out those responsible get a paid vaca in a federal pen but apparently it's OK for the Fed, State, or local muni to loot/borry from them.

I would imagine what comes next is private pensions, IRA's, 401K's and the lot, This has got to happen before complete devaluation, I mean you can't let trillions be cut in half BEFORE you decide to pilfer it right? The sorry part is that all liquidity will soaked up like a sponge by one government agency or another before this is all over with the "promise" that everything is still there, of course AFTER the 60% devaluation. Inflation is thru devaluation is the only path left if you are sitting at the top making all the rules and hoarding all the wealth. The signal of the end was when Ben waged war on the savers, without penalty for fiscal lunacy there is no end in sight why Corzine is still a free man is beyond me.

SheepDog-One's picture

'Central banks clearly stepping away and letting markets and economies fend for themselves' thats like saying theyre taking the paraplegic and dumping him out of his wheelchair at the start of the NYC Marathon and seeing how he finishes. 

nantucket's picture

the only difference this time is that it's not last time, so it's true to say it's different THIS time, other than that there's no difference.  make sense?  aahhh, what's the difference.

markettime's picture

Organized chaos to suspend elections maybe? 

treasurefish's picture

If only I had saved my dry powder for the Jackson Hole 2010 event....